In front of our TechCrunch City Spotlight: Tomorrow’s Pittsburgh event, I spoke with current Mayor Bill Peduto and Dave Mawhinney, Executive Director of the Swartz Center for Entrepreneurship at Carnegie Mellon University. Like many in the Steel City startup community, they both share a focus on the historically difficult task of keeping startups in the city.
For more information on investing in Pittsburgh, be sure to tune in to our City Spotlight on Tuesday, June 29, where we will be joined by Peduto, Duolingo Director of Engineering Karin Tsai, and Carnegie Mellon University President Farnam Jahanian. Register for the free event here.
I asked Peduto and Mawhinney what has been the biggest obstacle to building the Pittsburgh startup ecosystem. They both responded in the same way: venture capital. Fundraising is of course a hurdle regardless of location, but many venture capitalists have been reluctant to invest in startups outside of traditional hubs like San Francisco and New York.
“But one of the challenges is getting that capital into the community,” said Mawhinney, who leads CMU’s startup efforts. “If you look at how much Uber ATG put in, how much Argo AI and Aurora, collectively, those three companies, which have all CMU technologies licensed, they all have more than $ 7 billion in collective capital. Not everything will be spent here, but a large part will be spent here. But that won’t necessarily trickle down to the next AI startup that raises its first $ 3 million. “
Peduto said that the growth of the VC pipeline has been a focus during his time as mayor.
“I think we’ve been able to convince investors off the coast that companies don’t need to leave Pittsburgh to be very successful and see their investment pay off,” he told TechCrunch. “However, I think if we had more venture capital coming in here to help take early stage companies to the next critical stage of expansion, it would build on itself and highlight growth across the industry group, significantly. “.